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It is easy to get too pessimistic, but in this instance unemployment means lost consumer demand and that spells lost earnings. When earnings fall, stock prices fall and we enter a deflationary spiral. Volcker was good at inflation in the past, but this is a different problem. Economists do not know what to do with deflation. Helos with bucks from Ben is no answer but his silly remark emphasized how little we know about combating deflation. The Ice Age in Japanese equities is the laboratory for what does not work, but even Obama does not have a chance in breaking this spiral without also breaking the bank. Get nervous.
Nov 08 21:58 pm
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All Comments by whidbey »Unemployment Rate Soars, Recovery Outlook Worsens [View article]